Apple Pay: I’m Not Impressed

Author

Owen Thomas

October 23, 2014

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I know, I know. We’re all supposed to be celebrating the miracle of Apple Pay right now. That’s too bad.

After conducting several transactions with Apple’s new payments service, my conclusion is that Apple Pay makes the same mistake that several past attempts at reinventing payments made: It doesn’t solve any real problems for consumers.

Problem No. 1: Getting Set Up

To use Apple Pay to pay in stores, you need an iPhone 6 or 6 Plus that’s been upgraded to iOS 8.1. There are many reasons you might not want to upgrade to 8.1—but you have no choice if you want to use Apple Pay.

The iPhone 6 line has an NFC radio chip inside, which is required for contactless payments. Older phones will be able to pair with an Apple Watch for payments when that device comes out next year. For now, it’s the 6 or nothing.

Once you do, the process of setting up Apple Pay and adding a card via the Passbook app is reasonably straightforward. One of my cards was already in iTunes; I added another using my iPhone’s camera. I was stymied, however, when I tried to add my business credit card—apparently some types of cards, even from banks that are loudly touting their Apple Pay support via email blasts and Twitter ads, don’t work with the service yet.

In both cases, Apple Pay displayed the wrong image for my card in Passbook—which seems especially absurd, since it scanned my card to add it in the first place. This is probably my bank’s fault. It’s still confusing, since the image is meant to signal at a glance which card I’m using.

Problem No. 2: Finding A Store

So, where do you go to use Apple Pay? Good question. Apple has said it has more than 200,000 locations, including some familiar names like McDonald’s and Walgreens. But beyond memorizing a list of Apple’s partners, how are you supposed to find a store that takes Apple Pay?

Apple recommends looking for a contactless-payment logo or an Apple Pay logo. We did see the radio-wave logo in several stores, but at least in the San Francisco locations we checked, the Apple Pay logo doesn’t seem to have made it out into the wild yet. That will require a very slow process of retailers working with their payment processors to update their equipment and signage.

PayPal, by contrast, shows a directory of nearby locations that accept mobile payments. (Square used to, as well, in its now-abandoned Wallet app.)

It’s kind of silly that Apple doesn’t have an app for that. Why not make searching for Apple Pay locations an option within Apple Maps—or build it into Spotlight Search?

Problem No. 3: Dealing With The Cashier

In my experience, training varied wildly from store to store. Before the launch of Apple Pay, I asked a cashier at my local Walgreens if she’d heard about it. She hadn’t. On Monday, the day of launch, another cashier told me flatly “No” when I asked if that store was taking Apple Pay. A colleague corrected him.

At McDonald’s, a cashier was aware of Apple Pay but didn’t seem that excited about it.

At Panera Bread, my experience was different. The cashier knew about Apple Pay and talked about it effusively, pointing out the new payment terminals that he said had arrived just that morning. He guided me through the process, explaining that you had to keep your finger on the Touch ID button and tap the terminal at the same time.

At a nearby Starbucks, I quizzed a barista about Apple Pay. He hadn’t heard about it and was pretty sure Starbucks couldn’t take it. That was the right answer, despite Apple CEO Tim Cook flashing the Starbucks logo on a screen at an event last week. Starbucks isn’t using Apple Pay for in-store payments—only online transactions. And even those aren’t available yet.

Problem No. 4: It’s No Better Than Swiping

The reality of Apple Pay is this: Take your phone out. Hold your finger down. Tap. Wait for a notification on your phone. Get a paper receipt.

It turns out that that’s not much easier than the old way: Take your credit card out. Swipe. Get a paper receipt.

You’ll note that I didn’t mention signing anything. For most transactions under $50, Visa and MasterCard have programs that don’t require a signature. It speeds lines and the risk is low enough that banks and merchants aren’t worried about fraud. Most of the same big retailers who sign up for Apple Pay, particularly in food service, already use these programs.

I saw this reality reflected in the lines at Walgreens, McDonald’s, and Panera. I was the only one using Apple Pay. No one seemed particularly interested in what I was doing with my phone. I was just buying stuff, after all.

And that’s the main problem with Apple Pay: It’s not particularly faster than swiping a credit card. It doesn’t offer additional rewards or savings. I’m using the same credit card I was before.

Maddeningly, it doesn’t even do very obvious things that you’d expect it to. At Walgreens and Panera, I had to supply a phone number for those stores’ loyalty programs. I have a Passbook card for my Walgreens Balance Rewards program, but it’s not integrated into Apple Pay—and it turns out to be far faster to punch my phone number into the terminal than try to have the cashier scan my phone. (It seems like the scanners at Walgreens have trouble reading the barcode off a phone’s reflective screen.)

I did feel confident that my card was safe. With new credit-card breaches making headlines every month, I’d be inclined to use Apple Pay at vulnerable stores like Target and Home Depot for that reason alone. (Or Staples, for that matter.) But fear is a lousy motivator.

There will be a big reason to use Apple Pay a year from now. It’s called the liability shift. Starting October 2015, banks will require merchants to stop accepting swiped credit and debit cards, unless they want to assume the risk of fraudulent transactions. Instead, we’ll have to use newly issued cards with chips inside—or new systems like Apple Pay.

The problem with chip cards is that they’re slow—noticeably slower than swiping. But swiping won’t be an option at most retailers. There will be chaos at the cash registers as people get used to the new system. That makes next year a very good time to get people to try out Apple Pay.

Apple Pay has a separate service for making purchases within apps. That’s definitely interesting, though it requires developers to rewrite their apps—so that will take time to play out as well.

For the next 12 months, Apple has time to work out the kinks, advertise it more thoroughly, create tools for finding stores, get merchants to train their staff, and add coupons, discounts, and loyalty programs to the service.

But right here, right now, there’s not much about Apple Pay that makes it worth the bother.

Photo of Owen Thomas by Adriana Lee for ReadWrite; photos of Apple Pay courtesy of McDonald’s